Bus bankruptcy bedevils Central Mass. school districts

Tuesday

Dec 10, 2013 at 6:00 AMDec 10, 2013 at 8:00 PM

By Elaine Thompson TELEGRAM & GAZETTE STAFF

School districts are scurrying to find alternate busing for students after NY-based Atlantic Express Transportation Corp., one of the largest school bus operators in the country, announced that it is dissolving.

The company filed for Chapter 11 bankruptcy protection last month citing unsustainable labor costs in New York, its biggest market. Atlantic Express and its subsidiaries employ 5,500 employees nationwide, including about 400 in Massachusetts.

Last week, the labor union in New York rejected a contract offer from the company.

"Now our assets (including buses and contracts with individual school districts) are up for sale and we will be dissolving the company," said Carolyn Daly, spokeswoman for Atlantic Express.

Ms. Daly said the bankruptcy judge and financial institutions are reviewing bids that were received Dec. 6. She said it's unlikely that anything definitive will be decided before the end of the year.

"I don't know about particular contracts, but it will happen soon," she said, referring to whether a new company will take over individual district busing contracts. "The banks are in the middle of this. The banks and the courts have to sign off on all of this. It's a process."

In an interview last month, Ms. Daly said the company has the highest-paid school bus drivers in New York, earning $25 to $27 an hour, plus benefits. AE, she said, is losing market share to companies that pay $13 to $15 an hour with no benefits. AE drivers in Massachusetts are paid $16.50 to about $24 an hour, according to John P. McCarthy, regional vice president for Atlantic Express' Massachusetts operations. The company's bankruptcy filing lists both its assets and its liabilities as between $100 million and $500 million. Its biggest creditor is Amalgamated Transit Union Local 1181-1061, the union that represents its New York drivers. More than $13 million in wages and benefits are owed to those workers.

Joseph F. Francis, director of business and finance for Wachusett, AE's largest contract in the state, on Nov. 25 was the first district to solicit bids for alternate transportation. Mr. Francis said AE provides the district with 49 full-size buses and about 50 vans.

He said the district is looking for a company that will fulfill the remaining six months on the AE contract and for the next three years. Bids were due back Monday afternoon to be reviewed by the school committee at its meeting Monday night.

"I don't know when a decision will be made. There is so much information we don't know today," he said.

Richard Bedard, business manager for Millbury public schools, said he is using the state's emergency procurement procedure that eliminates the required sealed-bid process. He has been calling other transportation providers

"This is an emergency and a real safety concern," said Mr. Bedard.

He said a major concern is if a company is selected in the bankruptcy process to buy a district's contract, there has to be a compelling reason to not accept the new company.

Another possibility is the bidding process could end up with no bidders for AE or no bidder for the Millbury contract, for instance, he said.

"So that leaves you kind of high and dry," he said.

He said Millbury is hoping to know more by the end of the week. AE provides the district with 11 full-size buses, two vans and a wheel-chair accessible minibus.

"If we don't like what we hear or there are no bids, we've got to move on," he said. "We're just trying to make sure we have everything in place when we get back" from the holiday vacation on Jan. 2.